Top of main content

Tax in the United Kingdom

Your personal tax guide for the United Kingdom

The content in this tax guide is provided by EY.

Going to or leaving the UK

Local tax information for the United Kingdom.

Local information Details

Tax authority

HM Revenue and Customs (HMRC)

Website

www.gov.uk/government/organisations/hm-revenue-customs

Tax year

6 April to 5 April

Tax return due date

31 October (paper filing)
31 January (electronic filing)

Is joint filing possible

No

Are tax return extensions possible

No

Local tax information for the United Kingdom.

Local information

Tax authority

Details

HM Revenue and Customs (HMRC)

Local information

Website

Details

www.gov.uk/government/organisations/hm-revenue-customs

Local information

Tax year

Details

6 April to 5 April

Local information

Tax return due date

Details

31 October (paper filing)
31 January (electronic filing)

Local information

Is joint filing possible

Details

No

Local information

Are tax return extensions possible

Details

No

On 23 June 2016, the United Kingdom (UK) voted in a referendum to leave the European Union (EU). The UK/EU Withdrawal Agreement (WA) (and equivalents with the European Economic Area [EEA] and Switzerland) protected or grandfathered certain rights of citizens (and other persons covered) built up before 31 December 2020 beyond that date. In the absence of a new deal, various social security provisions enjoyed between the UK and the EU/EEA and Switzerland would disappear for many individuals who entered into a cross-border activity between the UK and the EU/EEA and Switzerland from 1 January 2021. On 24 December 2020, the UK and EU reached a Trade and Cooperation Agreement (TCA) covering various issues, including trade rules, fishing rights, legal provisions and, importantly, various elements of social security coordination. At the time of writing, these items were subject to formal sign-off by the EU Parliament and are therefore transitional. In the agreement, there are clear parallels with the old social security regulations in certain areas, but the agreement is not as all-encompassing as the old regulations. For example, certain provisions on coverage for longer-term assignments are not carried forward, but state old-age pension totalization provisions are carried forward.

From a personal tax perspective, the exit should have little impact on the operation of the UK personal tax and withholding regime on employment income, because currently, the interactions between the different EU states’ personal income tax regimes are governed by international tax treaties with the individual countries, and these are expected to continue to be in force after the UK leaves the EU. A minor change will be that certain non-UK resident EU nationals may lose their right to claim personal allowances.

The UK leaving the EU will still significantly change the social security landscape for certain mobile workers (and their families), both UK residents working within the EU and EU residents working in the UK, if the activity begins on or after 1 January 2021. This could lead to increased social security costs and compliance obligations for employers, together with implications for employees in relation to accessing and entitlement to public health care and benefits.

2020/21 income tax rates

2020/21 income tax rates.

Taxable income band GBP National income tax rates

1 to 37,500

20%

37,501 to 150,000

40%

150,001 +

45%

2020/21 income tax rates.

Taxable income band GBP

1 to 37,500

National income tax rates

20%

Taxable income band GBP

37,501 to 150,000

National income tax rates

40%

Taxable income band GBP

150,001 +

National income tax rates

45%

2020/2021 income tax rates for Scotland.

Scottish taxable income band GBP Scottish national income tax rates

1 to 2,085

19%

2,086 to 12,658

20%

12,659 to 30,930

21%

30,931 to 137,500

41%

137,501 +

46%

2020/2021 income tax rates for Scotland.

Scottish taxable income band GBP

1 to 2,085

Scottish national income tax rates

19%

Scottish taxable income band GBP

2,086 to 12,658

Scottish national income tax rates

20%

Scottish taxable income band GBP

12,659 to 30,930

Scottish national income tax rates

21%

Scottish taxable income band GBP

30,931 to 137,500

Scottish national income tax rates

41%

Scottish taxable income band GBP

137,501 +

Scottish national income tax rates

46%

A tax free personal allowance of GBP12,500 is available to certain taxpayers. The personal allowance is reduced by GBP1 for every GBP2 of 'adjusted net income' over GBP100,000.

The 2018-2019 tax year was the first year that the Scottish Parliament used its powers to impose different rates and thresholds from the rest of the UK.

From 6 April 2019, the Welsh Assembly can set part of the income tax rate. The current rates for Welsh taxpayers are the same as the UK excluding Scotland rates shown above.

The rates for dividends are 7.5%, 32.5% and 38.1%.

The rates for capital gains realised on disposals other than those realised on residential property disposals are 10% and 20%. For gains realised on disposal of residential property the rates are 18% and 28%. In addition, there is a rate of 10% for capital gains that qualify for entrepreneurs’ relief.

Expat tax guides

Read tax guides for expats provided by EY.

Additional information

The Tax Navigator section is provided by EY in accordance with their Terms and Conditions (PDF). EY accepts no responsibility for the accuracy of this information. By using this information, you are accepting the terms under which EY is making the content available to you based on the legislation and practices of the country concerned as of 15/09/21 by EY and published in its Worldwide Personal Tax Guide, 2020-21.

Tax legislation and administrative practices may change, and this content is a summary of potential issues to consider. This content is provided for guidance purposes only; it is not meant for direct implementation of transactions or reliance upon when considering entering into transactions. It should not be used as a substitute for professional tax, legal, financial, accounting, consulting, regulatory or other professional advice and you should seek professional advice before taking any action. It is your responsibility to ensure you make all relevant disclosures to the relevant tax authorities and that you are compliant with local tax legislation. EY accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.

HSBC accepts no responsibility for the accuracy of this information.

This information does not constitute advice and no liability is accepted to recipients acting independently on its contents. The views expressed are subject to change.

You might also be interested in

 

Opening an offshore account, can be an effective way to save, invest and manage money while abroad.

 

Steps to build a better financial future abroad.

 

Read our 10-step guide to moving abroad to make sure you've got everything covered.

Listening to what you have to say about services matters to us. It's easy to share your ideas, stay informed and join the conversation.